Rwandan Banks Made Profit of Frw9.8 Billion in First Quarter of 2017-Report

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Rwandan banks are on course to delivering super profits this year having posted 9.8 billion at the end of March 2017.

According to the quarterly financial stability committee and monetary policy committee meetings (MPC) total banking system net profit after tax amounted to 9.8 billion in March 2017. In the same period, microfinance sector profit was 937 million, while that of the insurance sector was Frw 8, 7 billion, up from 5.9 billion achieved in March 2016.

Assents of the financial sector remain healthy, despite an increase in non-performing loans (NPLS). The NPLs ratio of banks increased from 6.2 percent in March in March 2016 to 8.1 percent in March 2017.

The latest data from the Central Bank of Rwanda indicate the NPLs ratio of MFIs increased from 8.5 percent to 11. Percent. The committee noted that increased NPLs are due to weak credit analysis and monitoring and poor project design and implementation.

John Rwangombwa, Central Bank Governor said that to contain growth of NPLs, the Central Bank plans to continue to engage financial institutions on enhancement of their credit underwriting and monitoring standards.

BNR figures indicate that the financial sector continued to increase in the first quarter of 2017. Total assets of the banking sector increased by 11.3 percent year on year in the March 2017 to 2.4 trillion. In the same period, assets of the microfinance sector increased by 11 percent to Frw 226 billion.

Assets of the insurance sector and pension increased by 9.2 percent and 13 percent to Frw 353 billion and to Frw 629 billion respectively.

The monetary policy committee meetings also observed a decline in inflation stability in exchange rate and increase in credit to private sector compared to the corresponding period of 2016. The MPC decided to change the policy stance by reducing the central bank rate to 6.0 percent.

 

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